EAT explains when company owners are employees

The owners or controllers of a business can also enjoy protection as employees. The conditions that must be satisfied before such protection exists have now been clarified in a new ruling from the Employment Appeal Tribunal (EAT).

In a case in which it ultimately decided that a claimant did not qualify for employee protection, the EAT outlined how such issues should be decided.

Employees receive certain protections not available to people who are solely business owners or controlling shareholders. Employment Tribunals can only rule on disputes involving people who have been employees for 12 continuous months.

In the case of J.E. Clark and Clark Construction Initiatives (CCI), a company he founded and passed on to business partners, an Employment Tribunal found that for one month in the year before his dismissal Clark had been a controlling shareholder but not an employee of the firm.

It said, then, that it had no jurisdiction to hear the claim of unfair dismissal.

Full story at Out-Law